The Pakistani rupee showed strength
The Pakistani rupee showed strength, reaching nearly Rs281.50 against the US dollar, marking a 10-week high in the interbank market on Friday. This positive trend continued for the third consecutive working day, boosted by increased foreign currency inflows.
Data from the State Bank of Pakistan (SBP) indicated a 0.10% rise, amounting to Rs0.27, resulting in a closing rate of Rs281.40 against the US dollar. Over the last five weeks, the currency has seen a cumulative increase of 1.50%, or Rs4.24, providing some relief against imported inflation.
In the open market, the Exchange Companies Association of Pakistan (ECAP) reported a 0.06% rebound, closing the currency at Rs282.36/$. This upward movement followed reports of official inflows totaling $464 million, contributing to a rise in the country’s foreign exchange reserves held by the SBP to a five-and-a-half-month high of $8.22 billion.
Unexpected inflows from multilateral creditors, such as the Asian Infrastructure Investment Bank, World Bank, and Asian Development Bank, played a role in enhancing Pakistan’s capacity for timely import payments and foreign debt repayments.
The financial markets had anticipated these inflows after the International Monetary Fund executive board’s final approval for a $700 million loan tranche to Pakistan on January 11, 2023. However, the inflows arrived earlier, surprising the markets.
In a different trend, gold prices continued to decline, decreasing by 0.55%, or Rs1,200, reaching Rs217,000 per tola (11.66 grams) in Pakistan on Friday. This downward trend, observed for the third consecutive working day, resulted in a cumulative drop of almost 2%, or Rs4,300 per tola, over the past three days.
The decline in gold prices is attributed to a global trend, with gold falling by $9 to $2,058 per ounce (31.10 grams) on Friday, according to the All Pakistan Sarafa Germs and Jewellers Association.
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